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TMI Blog2020 (8) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Insolvency Resolution Process (in short 'CIRP') against Respondent No. 2 herein and the Adjudicating Authority, vide order dated 12th March, 2019 admitted the Application and imposed Moratorium. 4. The Appellant challenges the order of admission on the ground that the debt has been satisfied and set off in diminution of the amount of Rs. 1,561.87 Crores against debt of Rs. 226.50 Crores (Page 34, paragraph-A) claimed by Respondent No. 1 herein. It is further averred that the Adjudicating Authority overlooked the overwhelming evidence which shows that the Company's valuable stock of which market value is Rs. 1561.87 Crores which formed the security for loan facilities advanced by Bank of India Consortium was misappropriated/lost due to the fraudulent negligent acts of the members of Bank of India and its Consortium. It is also averred that the Bank of India along with other members of the Bank of India Consortium are jointly and severely liable to pay Rs. 1,561.87 Crores along with applicable interest to the Respondent No. 2- Company. Further, it is stated that the value of the Stock was more than sufficient to cover not only the loan facilities extended by the Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the stand of the Appellant that the Company's stock had been tampered with/misappropriated. It is further submitted that in August, 2018, Criminal Complaint was filed on behalf of the Respondent No. 2 before Economic Offences Wing, Mumbai (in short 'EOW') alleging that that Respondent No. 1 & Consortium misappropriated the Company's stock of Rs. 1561.87 Crores under various Sections of IPC for negligent activities of the Respondent No. 1, its Consortium Officers of ICICI Bank and Bank of India (Page 44 paragraph (H), it is stated that the FIR was registered and the EOW is investigating into the Complaint. 6. In view of the reasons, learned Counsel had referred to Form-1 filed by Respondent No. 1 herein where in Part IV debt is shown as Rs. 205 Crores and it is claimed the value of the stock seized by the ICICI Bank is approximately Rs. 1561.87. Learned Counsel submits that in the eye of law, Respondent No. 2 company has no liability to pay. In view of that the net stock amount and as per their valuation, the total stock was seized by ICICI Bank is worth Rs. 1561.86 Crores and the total amount claimed to be in default stated to be Rs. 226 Crores (page 34, paragraph - 9(A). I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the allegations whether there is any tampering or misappropriation with the stock of the Respondent No. 2 which was seized by the Receiver appointed by Debt Recovery Tribunal. In view of the progress of investigation no conclusion can be drawn as contended by the Appellant. Learned Counsel submits that in filing an Application under Section 7 of IBC, the essential ingredients are that there must be debt due which was not paid and so default. In the present case, Respondent No. 1 had established the debt due and default against Respondent No. 2 and basing on the demand of debt by the Respondent No. 1, the Application under Section 7 IBC has been admitted by the Adjudicating Authority. Learned Counsel submitted that the Appellant has not made out any case and the same need to be rejected. 9. Heard learned Counsel appearing for both the parties, perused pleadings and documents filed in their support. The only point for consideration is whether the Respondent No. 1 who filed an application before the Adjudicating Authority seeking initiation of CIRP is in accordance with law and whether it fulfilled the requirements under IBC for the purpose of said Section. 10. From the perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not deny the same. Financial Facilities have been duly granted and the amounts have been disbursed. There has been a default in repayment and the same has been admitted to some extent. This can be said in view of the reply letter dated 09.05.2016, wherein the Company replied to the notice of ICICI Bank saying that it was facing temporary financial difficulties and that they were taking steps towards regularising its loan account. It is worth to note that there is no denial of the debt amount by the Corporate Debtor. 21. Also, the pendency of proceedings in DRT is no bar to the present Section 7 proceedings in view of Section 238 of the Code. The petitioner's claim of existence of debt and default has been corroborated with ample evidence and is enough to hold a view in its favour. 22. On going through the facts and submissions of the petitioner and upon considering the same, it is concluded that the Financial Creditor has established that he loan was duly sanctioned and duly disbursed to the Corporate Debtor but there has been default in payment of Debt on the part of the Corporate Debtor. 23. Considering the above facts, I come to conclusion the nature of Debt is a 'F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in accordance of Section 7(5)(b) of IBC and had no legs under IBC to file a petition. We have perused Form-1 filed by the Respondent No. 1 with regard to the debt and default. We do not have any hesitation to say that the grounds raised by the learned Counsel for the Appellant does not have any merit. In view of the legal position as explained above, Respondent No. 1 is a Financial Creditor and the debt is a Financial Debt. In accordance of Section 5(8) of IBC, we hold that the Application filed by the Respondent No. 1 is maintained and the same is in accordance with law. The Appellant has failed to show by actionable material that the Valuation Report, got done officially when Receiver seized stock at the instance of ICICI has been held to be wrong. Mere averment to the contrary to claim set off that the stock was worth Rs. 1561.87 Crores without official valuation got done is not helpful. 17. With regard to Counter claim is concerned, the Adjudicating Authority cannot decide while admitting the Application. As such, all the essential requirements have been fulfilled and Application under Section 7 IBC was rightly admitted by the Adjudicating Authority. The Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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